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MH370 compensation bill could reach many hundreds of millions of dollars

Will OckendenUpdated
Wed 26 Mar 2014, 7:46 PM AEDT

Aviation disaster compensation lawyers say Malaysia Airways financial liabilities from the missing plane could reach many hundreds of millions of dollars. Litigation after tragedy is almost a certainty and international lawyers are circling what could be a large payday for their clients, and themselves.

Transcript

Litigation after tragedy is almost a certainty and international lawyers are circling what could be a large payday for their clients, and themselves.

Will Ockenden reports.

WILL OCKENDEN: As the search for the missing Malaysia Airlines flight MH370 drags on, questions about the Malaysian government's handling of the crisis are becoming more common.

(Sounds of woman yelling)

Angry relatives of the missing passengers are demanding answers. Family members of Chinese passengers marched on the Malaysian embassy in Beijing in protest.

(Woman speaks)

"The Malaysian government has been behaving in the same way for more than 10 days," this family member says. "We do not trust what they say."

Malaysia Airlines officials yesterday defended the use of an SMS which was used to break the news of flight MH370's fate.

When it appeared that satellite data from the UK company Inmarsat showed that the Malaysia Airlines plane flew into the Indian Ocean, Malaysia Airlines sent a text saying "We now have to assume beyond any reasonable doubt that MH370 has been lost and that none of those on board survived."

But despite the new satellite data which led to the text message, the final hours of flight MH370 remain a mystery, and as the days pass with no official confirmation of the wreckage, the question of who bears legal liability is also under question.

JERRY SKINNER: Most people file suits not because they've lost somebody but because of the way the airlines treat them, and Malaysia Airlines has done a masterful job of making these passengers' families angry.

WILL OCKENDEN: Jerry Skinner is an aviation and personal injury lawyer.

JERRY SKINNER: I've worked on every major air disaster that has occurred in the United States, and particularly in the Atlantic. I worked on Pan Am 103, TWA800, Swissair 111, EgyptAir 990 which was a suicide.

WILL OCKENDEN: Malaysia Airlines has so far offered a payment of $5,000 per family as financial assistance for expenses while the wait continues.

But Jerry Skinner says families should be paid much, much more.

He says there are minimum payouts due under the multilateral treaty known as the Montreal Convention.

JERRY SKINNER: By starting out with strict liability and no question of fault for the carrier, for the airline, that guarantees that everybody starts out at the same level with a payment from the airline that is not dependent upon their negligence or their fault.

WILL OCKENDEN: In US dollars, that's currently about $183,000 per person, putting the minimum compensation for the flight's disappearance at more than $40 million.

If fault or negligence is determined, the payouts could be much higher. Reuters reported that the missing jet's main insurer has already put $110 million in escrow to cover possible liabilities.

But if relatives do eventually sue for more money, Jerry Skinner admits the amounts can differ dramatically depending on which nation the passenger came from.

JERRY SKINNER: I was involved in the Pan Am 103 bombing and the settlement that was negotiated with the Libyan government, and the figures were very high for the Americans, but in part that was because most Americans report their taxes every year, have a record of their income.

WILL OCKENDEN: So in the Pan Am example, the American citizens got significantly more than citizens of other countries?

JERRY SKINNER: Not necessarily: the British did very well, the Americans did probably have the highest amount, but then the Americans at the end of the day had the greatest leverage, because we had co-operation from our State Department, and we had sanctions we could place against Libya.

WILL OCKENDEN: And of course, as with anything legal, lawyers don't come for free.

JERRY SKINNER: Everybody thinks American lawyers work for a third of the resolution: I don't. My Pan Am cases were 15 to 20 per cent, mostly in the range of 15-18 per cent. They're big cases and there is going to be a lot of money. There's no need to take anything that does not represent the effort that you put in, and I worked on the case for 15 years, and actually negotiated with Qaddafi's negotiating team for two-and-a-half years, and I did not take a third.